Auto Insurance: Why Medical Payments Coverage?
Car Insurance to Cover Additional Personal Injury Expenses
Mar 27, 2009
Imagine getting into an auto accident and receiving personal injury. The driver is fully covered for medical costs including personal health insurance and personal injury protection from his or her auto insurance.
Soon after the auto accident, the driver makes the unfortunate discovery that neither personal injury protection nor personal health insurance is enough to cover medical costs for the driver and his or her passengers. That’s where medical payments auto insurance might come in handy.
Auto Insurance: What Is Medical Payments Coverage?
Medical payments auto insurance is a no-fault optional auto insurance coverage that protects the driver financially in certain cases where personal health insurance and/or personal injury protection (PIP) is not enough to pay medical expenses for the driver and/or passengers.
Auto Insurance: How Is Medical Payments Coverage Different from Personal Injury Protection?
On the face of it, medical payments auto insurance and PIP auto insurance are nearly identical. Both auto insurance coverages help to pay for medical expenses for the driver and passengers in the event of personal injury caused by an auto accident, regardless of fault.
Depending on the way the accident claim is handled, the driver’s first line of defense is generally personal health insurance. However, personal health insurance may not cover all medical costs, and it does not extend to the driver’s passengers.
In this case, personal injury protection auto insurance provides a second layer of protection to help cover the driver and passengers for medical and other expenses including lost wages, household upkeep, and funeral expenses.
In certain cases where personal health insurance and/or PIP auto insurance fails to cover all medical expenses, medical payments auto insurance adds a third level of protection for the driver and passengers.
Auto Insurance: Who Benefits from Medical Payments Coverage?
If the driver elects personal injury protection auto insurance, there is a question of whether medical payments coverage is a redundant, thus unnecessary cost. The answer is yes, and no.
For drivers in most U.S. states, medical payments auto insurance would simply be an added layer of protection against medical costs in certain circumstances.
PIP auto insurance already covers medical payments, plus other expenses including dental, household upkeep, lost wages, and funeral expenses. Thus, for most drivers medical payments auto insurance would be optional, but not necessary.
However for drivers living in some states, particularly states that have enacted no-fault auto insurance laws such as Florida and New Jersey, PIP auto insurance pays 80 percent of the medical costs for drivers and their passengers in the case of an auto accident. The driver must then pay the 20 percent remainder.
In this case, it would make sense for the driver to carry medical payments auto insurance since it would help to pay for the 20 percent difference that personal injury protection auto insurance wouldn't cover.
Auto Insurance: The Bottom Line on Medical Payments Coverage
Auto insurance medical payments coverage can be somewhat confusing, even to auto insurance claims experts. Yet this optional coverage can add another layer of protection against medical costs.
With a firm understanding of medical payments auto insurance, how it differs from personal injury protection auto insurance, and who might benefit from medical payments coverage, the driver can make an informed decision as to whether medical payments auto insurance is right for his or her situation.
See related articles, “Auto Insurance: Why Personal Injury Protection?,” "How to Reduce Auto Insurance Rates and Save," and "Auto Insurance: Why Pay for Uninsured Coverage?"
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